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2010 Annual Report


Table of Contents Message from the Chair . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 2010 in Review. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Infrastructure Maintenance and Renewal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Underground Infrastructure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Overhead Infrastructure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Substations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Electric SCADA Network Upgrade . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Line Clearing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Infrared Scanning. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Power Outages/Emergency Responses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Other Initiatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Prevention . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Award for Sustainable Energy Leadership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10 Electricity Distributors Association Appointment of J Keech. . . . . . . . . . . . . . . . . . . . . . . 10 Kingston Hydro Green Energy Plan. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 System Statistics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 2010 Electric System Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11 Substation Utilization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 2010 System Reliability Indicators and Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11

Regulatory Issues Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 Cost of Service Rate Application. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Affiliate Relationships Code. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Customer Service. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Ontario Clean Energy Benefit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

12 12 12 13

Smart Meters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

Conservation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 Financial Management Discussion and Analysis . . . . . . . . . . . . . . . . . . . . . . . . 16 Statement of Earnings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Statement of Cash Flows . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Balance Sheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Business Risks Moving Forward . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

16 16 17 17

Management’s Responsibility for Financial Reporting and Auditor’s Report and Audited Financial Statements . . . . . . . . . . . . . . . . . 18 2010 annual report

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Message from the Chair

Throughout 2010, Kingston Hydro worked at balancing resources to submit a thorough Cost of Service Rate application to the Ontario Energy Board by the August deadline, while continuing to deliver reliable, dependable service to our customers. The Cost of Service Rate Application was viewed by all as a key factor in the ongoing viability of Kingston Hydro and we are extremely proud of the effort of all staff involved. Asset management and infra­structure upgrades continue to be a priority. The City of Kingston began the redevelopment of Princess Street (one of the oldest main streets in Canada) in 2010. This project included renewal of some of our oldest electrical system infrastructure, and was deemed a huge success by all involved and impacted. Upgrades were made to a number of other underground and overhead components of our distribution system, as we continued to reinvest limited capital dollars prudently.

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We are extremely proud of the imple­ mentation of our smart meter system. By the end of 2010, more than 95 per cent of the smart meter installation was completed, as was the communication network for these meters. As in past years Kingston Hydro continued to show leadership in the areas of conservation and demand management, and in enabling connections of green energy systems (Feed-in Tariff and Micro Feed-in Tariff), supporting our shareholders’ sustainability vision. I would like to personally thank our shareholder, directors and all those who collectively worked to make 2010 a success.

Mark Gerretsen, Chair Mayor, City of Kingston

Kingston Hydro


2010 in Review Infrastructure Maintenance and Renewal Underground Infrastructure Whenever possible, Kingston Hydro conducts electrical distribution work in conjunction with other utility and roadway work by the City of Kingston. This partnering approach reduces costs for Kingston Hydro, and provides benefit to the City by minimizing the duration of disruption affecting businesses, residents, and visitors alike. The Princess Street Reconstruction project was one such project and a major combined undertaking involving full roadway reconstruction from building face to building face on the two lower blocks of Princess Street as well as a block of King Street. The project initiated the first phase of a co-ordinated Downtown Action Plan involving infrastructure and urban renewal for the entire downtown area of the City of Kingston.

The predominantly underground electrical distribution infrastructure in this lower Princess Street area was in poor condition and was evidenced by the 1920-era clay ducts and 1940era sand-mortared ducts that had been subjected to undermining from various infrastructure work over time. A significant number of improvements were completed with this project, and even with the challenging co-ordination complexities and 2010 annual report

tight time constraints, the dedicated efforts by staff ensured Kingston Hydro was able to complete the $1 million worth of electrical distribution work on schedule. A similar, but smaller $200,000 project involved replacement of underground electrical infrastructure which had far surpassed its useful life along Barrie Street between William Street and Princess Street. New duct structures and cables were installed, while old collapsed clay tile ducts were decommissioned along with an underground electrical vault and shallow brick manhole. Kingston Hydro was also able to align this work with the water, sewer, and road replacement work undertaken by the City of Kingston. More work was completed in 2010 on the circuit along Wellington Street between Brock Street and Johnson Street, with new cable connections to the underground transformer vault located at Brock Street and Wellington Street. This vault had an old 5 kV oil switch with operating restrictions preventing it from being operated when under electrical load. This required a forced power outage on customers in the area to allow operation of the switch. The switch and the secondary breakers were replaced with new switchgear, load break centre, and breaker panel negating the need for these power disruptions. This upgrade also facilitates faster switching and improves worker safety with better electrical grounding. During inspections, staff noted that another transformer vault at the corner of Barrie Street and Princess Street was experiencing a high 3


volume of heavy vehicle traffic over the vault and gradually deteriorating. Kingston Hydro commissioned a structural assessment, and result­ ing in a complete replace­ment of the vault beams and top slab. In addition, the deteriorated breaker panel and the 50-year old transformer were replaced.

to approximately 3,000 poles. Industry ­s tatistics reveal fully dressed wood poles typically have a useful life of approximately 45 years, a chal­lenging backlog of replacement for years to come.

Overhead Infrastructure Each year our power line technicians per­ form a visual inspec­ tion of one third of the distribution system in accordance with Ontario Energy Board require­ ments, and the list of deteriorated poles requiring replace­ ment is factored into the work plan for overhead crews over the course of the year. Unfortunately, the number of poles identified for replace­m ent exceeds our capacity to replace them, so a prioritization process is in place to ensure proper diligence. In 2010, more than 300 poles in Area 3 (see area map) were identified for replacement, but as a result of limited resources we were only able to complete replacement of about half of those. The number of inspected poles deemed deteriorated is not surprising, as the graph below illustrates about half of Kingston Hydro’s distribution poles are over 50 years old. This equates

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Many deteriorated pole replace­ ment projects involve only one or two poles, but some power lines warrant replacement of a number of contigu­ ous poles. This was the situation for a few street sections such as Park Street (MacDonnell to Victoria), Helen Street (Johnson to Mack), Wellington Street (West to Johnson), Kingscourt Avenue (Kirkpatrick to Hillcrest), and the back­ yards along Roden Street.

Kingston Hydro


In 2010, over $1.5 million was expended on the overhead infrastructure with more than 185 new poles installed.

Substations At all substations, large battery systems serve to provide emergency power for various critical functions such as protection and control systems, supervisory control and monitoring and emergency lighting at the station. In the event a power outage affects the substation, these batteries will engage breakers to trip if required, allowing continued monitoring and controlling of any switching operations if needed. In 2010, more than $60,000 was spent to replace battery systems at nine substations to ensure continued safe operation in the event of power outage.

Electric SCADA Network Upgrade Kingston Hydro is currently working toward a complete capital asset replacement of its aging Supervisory Control and Data Acquisition (SCADA) system. This system enables the electrical operations team to remotely monitor and control vital distribution equipment, which in turn allows for real time notification of failures and outages as well as the ability to quickly restore power in some cases. 2010 annual report

The first phase of this replacement program upgrades aging communications infrastructure utilized by the SCADA system (legacy serial communications equipment) with industrial Ethernet switches equipped with high-speed fibre optic uplinks. During the year the in-house design, build, install, test, and commissioning of 18 electrical communication enclosures – which form a fault tolerant fibre optic ring connecting key Kingston Hydro distribution locations – was completed. This upgrade enables new and legacy technologies to simultaneously communicate over the same fibre optic connections and establishes the foundation on which a future SCADA system will communicate.

Line Clearing Annually, as part of the routine maintenance of the over­head system, tree-trimming and ­vege­ tation management activities are conducted during inspections to allow viewing of the lines and to ensure clearances are maintained. Kingston Hydro uses a three-year pruning cycle, in accordance with the Electrical & Utilities Safety Association Line Clearing Operations Safe Practice Guide. This means pruning is performed to an extent to keep tree growth from encroaching on 5


Infrared Scanning Infrared scans of the distribution system are used to identify potential problems, and the results once again proved very beneficial as we were able to address numerous hotspots before they could cause service disruptions. Each year, the entire 44 kV system is scanned, as well as all the substations and transformer vaults. One third of the 5 kV system is also scanned, in coordination with the annual visual inspection.

Substation Maintenance

the lines for a three-year period. Area 3 was targeted in 2010. We have experienced significant tree growth in the last few years due to the wet summers, triggering greater cutbacks and an increase in associated clearing costs. Generally, about one of five forced outages are caused by tree branches contacting power lines, so this work is even more important to ensure reliability of service, but of greater importance is the need arising from a public safety perspective.

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Work continued on our compre足hensive substation maintenance program developed by our staff in 2008 and implemented in 2009. The age and condition of many of the assets at our 17 substations dictates the actual time required by the crew to perform the maintenance work is far in excess of program outlines. This was

Kingston Hydro


anticipated and continues to be a challenge for the substation work crew. However the importance of the program was demonstrated in the autumn when the crew determined during maintenance work that eight of 11 circuit breakers at Substation No. 3 on Railway Street would not operate properly. The crew had to locate parts from breakers of the same make and model in order to repair and return all eight faulty breakers to service. It took two weeks to complete the breaker repairs.

2010 annual report

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Power Outages / Emergency Responses Power outages occur for a number of reasons, and most of the electrical interruptions occurring in 2010 were planned to accommodate infrastructure replacement and renewal. The total customer hours of interruption (TCHI), which for each outage is calculated by multiplying the number of customers affected by the length of the outage, was 29,287 for 2010, down from 94,917 TCHI for the previous year. When analyzing power outages forced due to emergencies, approx­ imately 30 per cent are the result of equipment failure. Almost 25 per cent of forced outages are the result of tree branches making contact with the live lines, underscoring the importance of our annual line clearing operations. Foreign interference – mainly from contractor excavating and vehicle strikes – accounted for 20 per cent of the outages, while weather events such as high winds and lightning triggered just over 10 per cent of all outages. The ability to respond to emer­gencies 24 hours a day is always a challenge. During 2010, two emer­gency responses could be deemed of extraordinary significance.

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In late April, the partial collapse of a hotel garage in downtown Kingston created a unique problem with which the Utility had to contend. Due to the structural instability resulting from the collapse, a no entry zone at and around the building was established. At the same time, the Electrical Safety Authority issued an order to the Utility to disconnect the power to the hotel. The vaults to which crews needed access in order to comply with the order were within this no entry zone. This meant the only means to disconnect the hotel would be to disconnect power upstream, which would force the outage on a large number of businesses. Considerable discussion ensued, and access to one of the vaults was gained enabling power to be disconnected, though a neighbouring business was affected. Repairs made afterwards included changes to the cable routing and switches to provide for independent feeds to local businesses there. On the Labour Day weekend, a large willow tree fell on the back­yard pole line between Churchill Crescent and College Street, des­troying two

Kingston Hydro


poles and the power line feeding the residences. It is generally difficult to get equipment into backyards, and this was no exception. A substantial amount of manual work was required including pole climbing, hoisting, and pulling. Many staff were unavailable on the holiday weekend so staff of other departments at Utilities Kingston assisted. The determination and dedication of the crews was well demonstrated, as they worked long hours together through that day, the night, and into the next day, to effect all the necessary repairs. It took just over 26 hours to finally restore power for the residents here.

Other Initiatives Prevention Every year Kingston Hydro participates in the Kingston Partners for a Safe Community Summer Safety Days. This three-day summer safety awareness event held at St. Lawrence College exposes hundreds of elementary school students to several sessions presented by a variety of organizations. Our interactive presentation on electrical safety delivered by our power line technicians or substation electricians is consistently one of the most popular and well received sessions.

2010 annual report

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In 2010, there were some serious incidents in the province involving contractors making contact with live distribution wires. In discus足sions with the Electrical Safety Authority, Kingston Hydro decided to be proactive in trying to prevent those types of incidents happening in Kingston, and started to install triangular warning flags on overhead electrical distribution lines in areas undergoing construction.

Electricity Distributors Association Appointment of Jim Keech

Award for Sustainable Energy Leadership

Kingston Hydro Green Energy Plan

Each year, St. Lawrence College awards the Kingston Hydro Award for Sustainable Energy Leadership to a returning student enrolled full-time in the Energy Systems Engineering Technology Program who has demon足 strated above average academic achieve足 ment and leadership through supporting sustainable energy education and deployment within the student population and Kingston community. In 2010, the recipient of this award was Haddon Wilson, a second year student enrolled in this program.

On April 26, 2010, Kingston Hydro submitted its Green Energy Plan to the Ontario Power Authority for approval, which was subsequently received. Kingston Hydro proposed no capital costs for the five-year period covered by this plan, and focused on streamlining process and procedures to effectively process applications received from others. The main thrust of the current plan is one of enabling and facilitating applications. In 2010, one feed-in tariff (FIT) customer and 16 microFIT customers were connected.

In 2009, Jim Keech, President and CEO of Kingston Hydro became a member of the Board of Directors of the Electricity Distributors Association (EDA). In 2010 he was elected to Vice Chair of the EDA for a term of one year from March 2010 to March 2011.

Kingston Hydro


System Statistics 2010 Electric System Requirements The load factor, based on a total energy consumption of 738,245,805 kWh and a peak demand of 134,412 kW is 67.4 per cent. The total loss factor for 2010 was 1.0345 compared with 1.0401 in 2009.

The demand requirement for the system decreased from 134,412 kW in 2009 to 125,098 kW in 2010, a decrease of 7.4 per cent. The average monthly demand increased from 109,467 kW to 112,901 kW, an increase of three per cent. The wholesale energy consumption (including losses) decreased from 739,609,585 kWh to 738,245,805 kWh, a decrease of 0.2 per cent.

Substation Utilization 25.00

Substation Utilization

20.00 15.00 MVA 10.00 5.00 1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

Substation No. Substation Rated Capacity

2009 Peak Load

2010 Peak Load

2010 System Reliability Indicators and Performance to 2007’s indices indicating a return to normal – or expected – system performance.

2007 - 2010 Reliability SQIs 3.143 SAIDI SAIFI CAIDI

2.125

Index Value

For system reliability indicators, a lower num­ber indicates better system reliability. Kingston Hydro’s 2010 reliability indices (SAIDI, SAIFI, and CAIDI) fall within the Ontario Energy 3.500 Board (OEB) prescribed 3.000 performance range; they are within the three-year range 2.500 of historical performance 2.000 as shown in Figure 1 . Since 2009’s indices were 1.500 1.366 1.306 abnormally high, comparison 0.956 of 2010’s indices to 2007 1.000 and 2008 values is prudent. 0.500 Indices from 2010 are similar 0.000

2007

1.479 1.076

0.913 0.674

1.418

0.759

0.738

2008

2009

2010

Year

2010 annual report

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Regulatory Issues Overview Kingston Hydro is regulated by the Ontario Energy Board (OEB). The elec­ tricity distribution industry is highly regulated, with distributors subject to a number of codes governing a wide ­ usiness activities. Kingston range of b Hydro, as a condition of its license, is required to stay compliant with cur­ rent regulations. As a regulated entity, Kingston Hydro is required to expend a significant amount of resources to monitor and implement changes to the Provincial regulations.

Cost of Service Rate Application In 2010, Kingston Hydro filed a Cost of Service Rate Application for new electricity distribution rates effective May 1, 2011. The prep­a ration of the Cost of Service Rate Application was a key focus during 2010, and consumed numerous resources from all areas of the organization, including financial, operations, engineering, and admin­ istration. As Kingston Hydro’s current distribution rates rank 76th lowest out of 83 distribution com­p anies and the existing rates do not provide sufficient revenue to carry out the asset management activities, this submission was seen as crucial to the ongoing sustainability of Kingston Hydro, as noted in the financial section of this annual report.

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Affiliate Relationships Code (ARC) In order to ensure compliance with the provisions of the ARC and in preparation for the 2011 Cost of Service Rate Application submitted to the Ontario Energy Board in August 2010, Kingston Hydro retained a third party to review the appropriateness of the charges between the affiliated entities. The review determined many of the charges were appropriate and in some cases the charges should be allocated using a different methodology. Kingston Hydro has committed to implementing the recommendations of the report.

Customer Service In 2010, the OEB released amend­ ments to the Retail Settlement Code, Distribution System Code, and Standard Supply Service Code with the purpose of standardizing Local Distribution Company (LDC) customer service policies and implementation of billing, security deposit, discon­n ection, rate classification, and opening and closing of accounts. Effective October 1, 2010 a num­ ber of changes were imple­m ented deal­­ing with the provision of arrears management programs for customers experiencing difficulty paying their bills. Additional changes will be required in subsequent years.

Kingston Hydro


These amendments required extensive changes to a number of Kingston Hydro’s practices including how we deal with security deposits and manage bad debt risks and also necessitated changes to our customer information system and billing and collecting practices.

Ontario Clean Energy Benefit The Ontario Clean Energy Benefit was announced by the Government of Ontario late in 2010. Effective on the first consumption bills in January 2011, Kingston Hydro implemented the required changes to provide the Ontario Clean Energy Benefit – a 10 per cent reduction on electricity charges. All required com­ munications were also implemented. This program is planned to be in place for a five year period. This Benefit provided good news for Kingston Hydro’s customers, however this announcement required an immediate shift in priorities for staff involved with our billing processes and system programming, which – coupled with the customer service amendments noted above and smart meter implementation – proved to be a resourcing challenge.

2010 annual report

Smart Meters Kingston Hydro initiated deployment of smart meters in March 2010. We began reading of the smart meters over the newly installed com­ munications system and used actual reads instead of estimating bills every other month. A second communication tower was installed in late May of 2010. By December 31, 2010, 97 per cent of resi­dential customers and 94 per cent of small commercial customers were using installed smart meters. Preparations were well underway to transition our customer information system (CIS) from current tiered pricing billing to time- of-use (TOU) billing to meet the Ontario Energy Board’s mandated transition date of June 2011.

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Conservation Electricity Conservation Initiatives

cent of Power Savings Blitz targets.

In 2010, Kingston Hydro offered a number of Ontario Power Authority (OPA) contracted electricity conser­ vation initiatives, prepared a lost revenue adjustment mechanism as part of our Cost of Service Rate Application to the Ontario Energy Board, developed a 2011 to 2014 Conservation Plan, and kept up with significant changes in the evolving rules and regulations regarding conservation programming.

Overall, 2010 was a transitional year for conservation efforts. With a new regulatory conservation mandate, Kingston Hydro customers can expect a greater focus on the delivery of electricity conservation programs by the utility in the coming years.

During 2010, Kingston Hydro reacted to the enactment of conservation targets as a condition of our licence for 2011 to 2014 and development by the OPA of new and expanded programs for 2011. As a result of these pending changes, in 2010 many customers adopted a wait and see approach. Even with these factors limiting uptake, Kingston Hydro delivered solid conservation performance in 2010. O PA p r o g r a m s , i n c l u d i n g t h e Electricity Retrofit Incentive Program, the Power Savings Blitz, Power Pledge, the Community Challenge, and the Great Refrigerator Roundup, along with community initiatives including Join the Journey and the Kingston Unplugged Earth Hour concert, delivered electricity savings equivalent to removing 300 Kingston Hydro residential customers from the grid. We exceeded targets for the Electricity Retrofit Program and achieved 96 per

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Ontario Power Authority Programs The Electricity Retrofit Incentive Program is designed to encourage com­ mercial, industrial, and institutional businesses to retrofit their facilities with electricity efficient technology. The program drives replacement of older, inefficient technology with newer electrically efficient technology by larger commercial customers. In 2010, more than $200,000 in incentive payments to Kingston Hydro customers generated approximately $4 million in energy efficiency investments in central Kingston. These measures will reduce peak demand by 275kW, which exceeds Kingston Hydro’s target of 240kW. These projects will also save more than two million kilowatt hours of electricity annually, enough to power one per cent of all households in Kingston Hydro’s territory. The Great Refrigerator Roundup Program is a residential program aimed at removing old, under utilized, and inefficient appliances from residential or commercial customers and disposing

Kingston Hydro


of them in an environmentally responsible manner. Market saturation in this long-running program was observed in 2010. Despite being a well established program with significant mass media marketing support, only 136 refrigerators were collected in Kingston Hydro territory, less than half the target of 371. This continues a decline in participation observed over the past two years. The Power Savings Blitz program provides up to $1,000 for a retrofit (including material and labour) to small businesses with electricity demand of less than 50 kW. Kingston Hydro came close to reaching its 2010 target of 331 participants with 319 small commercial customers involved in the Power Savings Blitz. These customers invested $350,000 of incentives plus some of their own funds to generate 200kW of peak demand reductions and 800,000kWh in annual electricity savings – enough to power 91 Kingston Hydro residential customers.

Community Initiatives Funding Staff helped promote the observance of Earth Hour in Kingston, supporting the second annual Kingston Unplugged off-grid, solar and wind powered concert in a darkened Market Square on March 27. This event, with record attendance of more than 1,100 people, allowed Kingston Hydro to deliver conservation messages to a receptive audience.

2010 annual report

The OPA enhanced the Community Challenge in 2010 with a new Power Pledge promotion running throughout the summer. The Community Challenge is a competition between Ontario municipalities designed to draw attention to energy conservation in commemoration of the 2003 blackout. In 2009, Kingston Hydro won the provincial Woodstock Cup for achieving the highest drop in electricity consumption (MWh) during the 12-hour assessment period. In 2010, Kingston Hydro placed third in the province and first by a wide margin in comparison to communities of similar size. Join The Journey – a local group hosted by the Kingston Sustainability Centre and supported by a large number of community partners – assisted with Community Challenge marketing as well as delivering the Power Pledge campaign to doorsteps throughout Kingston Hydro territory. Valuable information about energy efficiency was distributed to and collected from customers. Christmas lights in City Park were installed and maintained by volunteers from our Utility and the Kingston Electrical Association. As a light-emitting diode (LED) awareness measure, Kingston Hydro sponsors this annual display.

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Financial Management Discussion and Analysis Statement of Earnings In 2010, local distribution revenue of $9.5 million was marginally less than 2009 revenue due to a decrease in distribution rates as prescribed by the Ontario Energy Board (OEB) effective May 1, 2010. Non-distribution revenue including pole rentals and account setup charges approximated prior years and was at expected levels for 2010. Interest income was higher in 2010 due to higher interest rates earned on our bank balance. Miscellaneous revenue was lower in 2010 as it was a transition year for energy conservation programs. Operating expenses increased to $6.1 million in 2010 from the 2009 value of $5.4 million. The overall increase in 2010 operating expenses resulted from an increase in operation and maintenance expenses due to circuit maintenance and line clearing activities. There was also an increase in costs year-over-year for billing and collecting as the bad debt expense increased in 2010 after a below normal bad debt expense in 2009. General and administration expenses increased as a result of an increase in regulatory costs associated with the Cost of Service rate application. In addition, interest expense also increased this year due to the higher interest rates experienced in 2010. Depreciation expenses increased 16

by $164,000 because of additional reinvestment in capital infrastructure. As a result of the above-noted items, earnings before income taxes were $817,000 compared to $2,148,000 in 2009. Kingston Hydro paid $272,000 in taxes to the Ontario Electricity Financial Corporation during the year, resulting in net earnings of $545,000.

Statement of Cash Flows Kingston Hydro invested $3.7 million in property and equip­ ment in 2010. Of this amount, customers contributed $780,000 toward the construction costs for a net capital expenditure of $2.9 million. To t a l c a p i t a l i n v e s t m e n t a n d operating expenses amounted to $9.8 million in 2010 compared to the 2009 total of $9.1 million.

Balance Sheet At December 31, 2010, Kingston Hydro’s current assets totalled $17.2 million compared to current liabilities of $16.2 million. The amount due from the City of Kingston of $2.3 million represents funds held in the City of Kingston’s bank account belonging to Kingston Hydro and are available for its use. The net amount of regulatory liabilities at the end of the year is Kingston Hydro


$1.8 million. This is primarily related to the obligation of future tax assets to be recovered and ultimately returned to ratepayers through future rate adjustments.

portion of the hydro bill in order to continue to operate, maintain, and reinvest in the hydro infrastructure particularly in the older areas of the city.

At December 31, 2010, Kingston Hydro has invested $3.9 million in regulatory assets related to the purchase and installation of smart meters.

Additionally, Kingston Hydro’s oldest substation, located on Queen Street, is due for a massive overhaul in the next five years. This rebuild will be the subject of scrutiny from the OEB and will only commence once a special rate increase is approved by the OEB.

Kingston Hydro borrowed an additional $3.2 million in 2010, primarily to finance the smart meter project. Contributed surplus increased in 2010 by approximately $364,000, due to the transfer of Kingston Hydro-owned vehicles from the City of Kingston to Kingston Hydro. In order to look at the true picture of the electrical distribution business, the total shareholder’s equity of $19,601,628 can be broken down as follows:

Business Risks Moving Forward In 2010, Kingston Hydro filed a Cost of Service rate application for new distribution rates effective May 1, 2011. Kingston Hydro’s current distribution rates rank 76th lowest out of 83 distribution companies. Kingston Hydro has not received a cost of service rate adjustment since May 1, 2006. The Company spent a significant amount of time to prepare and defend the rate application in 2010 and requires a major increase in the distribution

2010 annual report

Kingston Hydro continues to recognize the financial requirements of its shareholder through interest payments. This is financially challenging as Kingston Hydro is required to balance the obligation it has to its shareholders and the need to manage its operation, and maintain and replace its infrastructure. Kingston Hydro has been under a historical rate structure since 2006, which has restricted the ability to cover the growing complexity of the industry. It is hoped the rate order obtained from our Cost of Service Rate Application will result in a four-year revenue requirement enabling Kingston Hydro to continue to operate a safe and reliable distribution system.

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Management’s Responsibility for Financial Reporting The accompanying financial statements and related financial information are the responsibility of the management of Kingston Hydro Corporation. These financial statements have been prepared in accordance with generally accepted accounting principles, as prescribed by the Canadian Institute of Chartered Accountants, and involve management making best estimates and judgments. In addition, management is responsible for establishing and maintaining an adequate system of internal control to ensure assets are safeguarded and the accounting systems provide accurate, timely, and reliable information. The Board of Directors of Kingston Hydro Corporation is responsible for ensuring management has implemented the necessary systems, procedures, and controls required to ensure the reliability and timeliness of the financial information. The Board is also responsible for reviewing the financial statements with management and approving the financial statements. KPMG LLP, the independent auditors appointed by the Board of Directors, are responsible for providing an audit opinion on the financial statements based on the results of their audit tests and procedures.

J.A. Keech President and CEO

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R. Murphy Treasurer

Kingston Hydro


Financial Statements of

KINGSTON HYDRO CORPORATION Year ended December 31, 2010

Year ended December 31, 2010

19


KPMG LLP Chartered Accountants

863 Princess Street Suite 400 PO Box 1600 Stn Main Kingston ON K7L 5C8 Canada

Telephone (613) 549-1550 Telefax (613) 549-6349 www.kpmg.ca

INDEPENDENT AUDITORS' REPORT To the Shareholders of Kingston Hydro Corporation We have audited the accompanying financial statements of Kingston Hydro Corporation, which comprise the balance sheet as at December 31, 2010, the statements of earnings, retained earnings and cash flows for the year then ended, and notes, comprising a summary of significant accounting policies and other explanatory information. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with Canadian generally accepted accounting principles, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. Auditors’ Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Canadian generally accepted auditing standards. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on our judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the financial statements present fairly, in all material respects, the financial position of Kingston Hydro Corporation as at December 31, 2010, and its results of operations and its cash flows for the year then ended in accordance with Canadian generally accepted accounting principles.

Chartered Accountants, Licensed Public Accountants April 18, 2011 Kingston, Canada

20

Financial Statements of KINGSTON HYDRO CORPORATION


KINGSTON HYDRO CORPORATION

Financial Statement

Year ended December 31, 2010

Financial Statements Balance Sheet

22

Statement of Earnings

23

Statement of Retained Earnings

24

Statement of Cash Flows

25

Notes to Financial Statements

26

Year ended December 31, 2010

21


KINGSTON HYDRO CORPORATION

22

Financial Statements of KINGSTON HYDRO CORPORATION


KINGSTON HYDRO CORPORATION KINGSTON HYDRO CORPORATION Statement of Earnings

Year ended December 31, 2010, with comparative figures for 2009 2010

2009

9,539,835 52,379 143,868 74,870 329,670 10,140,622

$ 9,606,109 55,266 162,027 32,852 551,747 10,408,001

2,497,482 940,361 1,695,738 214,011 743,812 6,091,404

2,308,140 753,646 1,540,322 200,686 590,720 5,393,514

4,049,218

5,014,487

981,785

780,453

Depreciation and amortization

2,250,071

2,086,472

Earnings before income taxes

817,362

2,147,562

Revenue: Local distribution revenue (note 3) Account set-up charge Pole rentals Interest Miscellaneous

$

Operating expenses: Distribution expenses, operation Distribution expenses, maintenance General and administrative Community relations Billing and collecting Earnings before the undernoted Interest expense

Payments in lieu of corporate income taxes (note 14): Current Future (reduction) Net earnings

281,701 (9,645) 272,056 $

545,306

945,537 36,950 982,487 $ 1,165,075

See accompanying notes to financial statements.

Year ended December 31, 2010

2

23


KINGSTON HYDRO CORPORATION KINGSTON HYDRO CORPORATION Statement of Retained Earnings

Year ended December 31, 2010, with comparative figures for 2009

Retained earnings, beginning of year Net earnings Dividends

2010

2009

$ 3,833,602

$ 2,918,527

545,306

1,165,075

–

Retained earnings, end of year

$ 4,378,908

(250,000) $ 3,833,602

See accompanying notes to financial statements.

24

Financial Statements of KINGSTON HYDRO CORPORATION 3


KINGSTON HYDRO CORPORATION KINGSTON HYDRO CORPORATION Statement of Cash Flows

Year ended December 31, 2010, with comparative figures for 2009 2010

2009

545,306

$ 1,165,075

Cash provided by (used in): Operations: Net earnings Items not involving cash: Depreciation and amortization Future income taxes Change in non-cash operating balances (note 15)

$

Financing: Dividends Borrowings of bank loan Investments: Purchase of capital assets Contributions toward costs of capital assets acquired Repayment of long-term loans receivable Increase (decrease) in cash Cash, beginning of year Cash, end of year

$

Supplemental cash flow information: Interest paid Payments in lieu of income taxes

$

2,250,071 (9,645) (5,664,549) (2,878,817)

2,086,472 36,950 572,562 3,861,059

– 3,211,955 3,211,955

(250,000) 2,100,455 1,850,455

(3,679,059) 780,171 250,000 (2,648,888)

(3,735,136) 94,096 250,000 (3,391,040)

(2,315,750)

2,320,474

2,340,508

20,034

24,758

$ 2,340,508

916,659 946,478

$

878,257 700,895

See accompanying notes to financial statements.

Year ended December 31, 2010

4

25


KINGSTON HYDRO CORPORATION Notes to Financial Statements

Year ended December 31, 2010 The principal business of Kingston Hydro Corporation (the “Company”) is to distribute electric power to the residents of the City of Kingston and to manage the City’s electric power system. The business is regulated by the Ontario Energy Board through the issuance of licenses which require compliance with established market rules and codes. The Company is wholly-owned by the Corporation of the City of Kingston (the “City of Kingston”). 1. Significant accounting policies: The financial statements have been prepared by management in accordance with Canadian generally accepted accounting principles (“GAAP”) including accounting principles prescribed by the Ontario Energy Board (the “OEB”) in the Accounting Procedures Handbook (the “AP Handbook”) for Electric Distribution Utilities, and reflect the significant accounting policies summarized below: (a) Rate regulation: Kingston Hydro Corporation is regulated by the Ontario Energy Board (“OEB”) under authority of the Ontario Energy Board Act, 1998. The OEB is charged with the responsibility of approving or setting rates for the transmission and distribution of electricity and the responsibility for ensuring that distribution companies fulfill obligations to connect and service customers. The OEB has the general power to include or exclude costs, revenues, losses or gains in the rates of a specific period, resulting in a change in the timing of accounting recognition from that which would apply to enterprises operating in a non-regulated environment. Specifically, the following accounting treatments have been applied: (i) C  osts incurred with respect to deregulation of the electricity industry in Ontario, have been deferred pursuant to regulations underlying the Electricity Act, 1998, (“EA”) and are subject to review and approval for recovery by the OEB. (ii) A  n amount to represent the cost of funds used during construction and development has been added to the carrying value of assets under construction based on the value of construction-in-progress. (iii) T  he Company has deferred the recognition of certain pre-market opening cost of power variances and post-market opening retail settlement variances in accordance with Article 490 of the OEB’s AP Handbook.

26

Financial Statements of KINGSTON HYDRO CORPORATION


KINGSTON HYDRO CORPORATION

Notes to Financial Statements (continued) Year ended December 31, 2010 1. Significant accounting policies (continued): (b) Revenue recognition: Revenue is recognized on the accrual basis, which includes an estimate of unbilled revenue, representing customer usage from the date of each customer’s last meter reading until the end of the fiscal year. Actual results could differ from estimates made of actual electricity usage. Billed and unbilled revenues presented on the balance sheet include distribution revenue as well as power charges billed and collected on behalf of the Independent Electricity System operator (“IESO”). The Company presents distribution revenue earned on a gross basis but presents amounts billed in respect of power, connection, transmission and wholesale market service charges on a net basis. Services and other revenue are recognized as services are rendered or contract milestones are achieved. (c) Inventory: Inventories consist primarily of maintenance and construction materials. To the extent that such materials are used for upgrades and improvements to its electricity distribution system, they are capitalized as capital assets. Once capitalized, these items are not amortized until they are put into service. Inventories are carried at the lower of cost and net realizable value, with cost determined on an average cost basis net of a provision for obsolescence. (d) Capital assets: Capital assets are recorded at cost and include contracted services, materials, la­ bour, engineering costs, overhead and an allowance for the cost of funds used dur­ ing construction when applied. Certain assets may be acquired or constructed with financial assistance in the form of contributions from developers or customers. The OEB requires that such contributions, whether in cash or in-kind, be offset against the related asset cost. Contributions in-kind are valued at their fair market value at the date of their contributions. When identifiable assets, such as buildings, substation equipment, system supervi­ sory equipment, meters, tools and vehicles are retired or otherwise disposed of, their original cost and accumulated amortization are removed from the accounts and the related gain or loss is included in the operating results for the related fiscal period. The cost and related accumulated amortization of grouped assets, such as the over­ head distribution system, is removed from the accounts at the end of their estimated service life. Year ended December 31, 2010

27


KINGSTON HYDRO CORPORATION

Notes to Financial Statements (continued) Year ended December 31, 2010 1. Significant accounting policies (continued): (d) Capital assets (continued): Depreciation is provided on the straight-line basis using the following annual rates: Asset Rate Buildings and fixtures

2.00%

Substation equipment

3.33%

Distribution system

4.00%

Meters 4.00% Tools and equipment

10.00%

System supervisory equipment Application software

6.67% 20.00%

Vehicles 10.00% Leasehold improvements

Over the term of the lease

Miscellaneous intangible plant

2.50%

Capital work-in-progress comprises capital assets under construction, assets not yet placed into service and pre-construction activities related to specific projects expected to be constructed. An allowance for the cost of funds used during the construction period has been applied to the carrying value of such assets at rates ranging from 4.01% to 4.66% (2009 - 4.66% to 6.61%). (e) Contributed capital: Amounts recovered from customers on capital projects are recorded as a capital asset contra account and amortized on a straight-line basis at the same rate used for amortization of the related property and equipment. Contributed capital is included in the respective capital asset categories in note 4. (f) Incorporation costs: Incorporation costs are recorded at cost, net of accumulated amortization. Amortization is provided on a straight-line basis over ten years.

28

Financial Statements of KINGSTON HYDRO CORPORATION


KINGSTON HYDRO CORPORATION

Notes to Financial Statements (continued) Year ended December 31, 2010 1. Significant accounting policies (continued): (g) Regulatory liabilities: Regulatory liabilities are comprised principally of the following:  etail settlement variances - represent accumulated variances that have occurred (i) R since January 1, 2005 and that have accumulated pursuant to direction from the OEB. Specifically, these amounts include: -v  ariances between the amount charged by the IESO and Hydro One Network Inc. for the operation of the markets and grid, as well as various wholesale market settlement charges, transmission charges as compared to the amount billed to consumers based on the OEB approved wholesale market services rate; and -v  ariances between the amounts charged by the IESO to allow for purchases of imported power as compared to the amounts billed to consumers based on the OEB approved rates. (ii) R  egulatory asset recoveries - represent accumulated recoveries of regulatory assets through increased rates over a two-year period. Regulatory liabilities incur interest at rates ranging from 0.55% to 1.2% (2009 – 0.55% to 2.45%) per annum, calculated using the simple interest method. (h) Measurement uncertainty: The preparation of financial statements in conformity with Canadian generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the period. Accounts receivable, billed revenue receivable and unbilled revenue are stated after evaluation of amounts expected to be collected or recovered and an appropriate allowance for doubtful accounts. Employee future benefit liabilities owing to 1425445 Ontario Limited (operating as “Utilities Kingston�) are based on certain assumptions arising from an actuarial valuation performed on behalf of that Company. These assumptions include interest (discount) rate, salary escalation, the average retirement age of employees, employee turnover and expected health and dental care costs.

Year ended December 31, 2010

29


KINGSTON HYDRO CORPORATION

Notes to Financial Statements (continued) Year ended December 31, 2010 1. Significant accounting policies (continued): (h) Measurement uncertainty (continued): Due to inherent uncertainty involved in making estimates, actual results could differ from those estimates recorded in preparing these financial statements, including changes as a result of future decisions made by the OEB and Minister of Energy. Any adjustments to the estimates made will be recorded in the year they are identified. (i) Payments in lieu of corporate income taxes (‘’PILs’’): The Company is exempt from taxes under the Income Tax Act (Canada) (“ITA”) and the Ontario Corporations Tax Act (“OCTA”). Pursuant to the Electricity Act (“EA”), 1998, the Company is required to compute payments in lieu of taxes under the ITA and OCTA and remit such amounts there under to the Ontario Electricity Financial Corporation (“OEFC”). These amounts, referred to as PILs under the EA, are applied to reduce certain debt obligations of the former Ontario Hydro continuing in OEFC. The Company applies the asset and liability method of accounting for payments in lieu of income taxes. Under the asset and liability method, future tax assets and liabilities are recognized, to the extent such are determined likely to be realized, for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Future tax assets and liabilities are measured using enacted or substantively enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on future tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the date of enactment or substantive enactment. Future income taxes recoverable have been recorded in the accounts and a corre­ sponding regulatory liability has been set up as future income taxes are recovered through future rate increases/decreases. (j) Employee future benefit liabilities: The Company’s employee future benefit liabilities represent its accumulated obligation to Utilities Kingston under a service agreement. The Company accrues its obligations to Utilities Kingston for employee benefit plans. The cost of non-pension post-retirement and post-employment benefits earned is actuarially determined using the projected benefit method pro-rated on service and management’s best estimate of salary escalation, retirement ages of Utilities Kingston’s employees and expected health care costs. Utilities Kingston’s employees participate in the Ontario Municipal Employees Retirement Fund (OMERS), a multi-employer public sector pension fund, as a defined benefit plan. 30

Financial Statements of KINGSTON HYDRO CORPORATION


KINGSTON HYDRO CORPORATION

Notes to Financial Statements (continued) Year ended December 31, 2010 1. Significant accounting policies (continued): (k) Financial instruments: (i) Section 3855, Financial Instruments - Recognition and Measurement: Under the standards, financial assets and financial liabilities are initially recognized at fair value and their subsequent measurement is dependent on their classification as described below. The standards require that all financial instruments be classified either as held-fortrading (“HFT”) financial assets or liabilities, available-for-sale (“AFS”) financial assets, held-to-maturity (HTM”) financial assets, loans and receivables or other liabilities. The standards require that all financial instruments, ­including all derivatives, be measured subsequent to their initial recognition at fair value with the exception of loans and receiv­ ables, debt securities classified as HTM financial assets, AFS financial assets that do not have quoted market prices in an active market and other liabilities. Classification of financial instruments: The following is a summary of the classification the Company has applied to each of its significant categories of financial instruments outstanding. Financial instrument Due from the City of Kingston Amounts receivable Billed revenue receivable Receivable from related party Bank loan Accounts payable and accrued liabilities Due to retailers Deposits payable Note payable to City of Kingston

Classification Loans Loans Loans Loans

and receivables and receivables and receivables and receivables Other liabilities Other liabilities Other liabilities Other liabilities Other liabilities

Held-for-trading The Company has not designated any non-derivative financial assets as HFT, nor has it designated any non-derivative financial liabilities as HFT. Available-for-sale The Company has not designated any financial assets as AFS. Held-to-maturity The Company has not designated any financial assets as HTM. Loans and receivables Loans and receivables are non-derivative financial assets with fixed or determinable payments. Loans and receivables are recorded at amortized cost, using the effective interest rate method. Year ended December 31, 2010

31


KINGSTON HYDRO CORPORATION

Notes to Financial Statements (continued) Year ended December 31, 2010 1. Significant accounting policies (continued): (k) Financial instruments (continued): (i) Section 3855, Financial Instruments - Recognition and Measurement (continued): Other liabilities Other liabilities captures all financial liabilities that are not required to be designated by the Company as held for trading upon initial recognition. Other liabilities are recorded at amortized cost, using the effective interest rate method. Derivatives The Company has not identified any derivative instruments. (ii) Section 1535, Capital Disclosures: This section requires the disclosure of (i) an entity’s objectives, policies and process for managing capital; (ii) quantitative data about an entity’s managed capital; (iii) whether an entity has complied with externally imposed capital requirements; and (iv) if an entity has not complied with such externally imposed capital requirements, the consequences of such non-compliance. Disclosure requirements pertaining to Section 1535 are contained in note 18 - Capital Risk Management. 2. Transition to International Financial Reporting Standards: The Canadian Accounting Standards Board (“AcSB”) has adopted a strategic plan that will have Canadian GAAP converge with IFRS, effective January 1, 2011 which will require entities to restate, for comparative purposes, their interim and annual financial statements and their opening financial position. In October 2010, the AcSB approved the incorporation of IFRS 1 into Part 1 of the Canadian Institute of Chartered Accountants (“CICA”) Handbook for qualifying entities with activities subject to rate regulation. Part I of the CICA Handbook specifies that first-time adoption is mandatory for interim and annual financial statements relating to annual periods beginning on or after January 1, 2012. The amendment also requires entities that do not prepare their interim and annual financial statements in accordance with Part I of the Handbook during the annual period beginning on or after January 1, 2011 to disclose that fact.

32

Financial Statements of KINGSTON HYDRO CORPORATION


KINGSTON HYDRO CORPORATION

Notes to Financial Statements (continued) Year ended December 31, 2010 2. Transition to International Financial Reporting Standards (continued): The Corporation has decided to implement IFRS commencing on January 1, 2012. On July 28, 2009, the OEB issued its Report of the Board - Transition to IFRS, which contains recommendations on how regulatory reporting requirements should change in response to IFRS. The OEB has now initiated a second phase in its transition project, which involves amending certain regulatory instruments. The Corporation continues to evaluate the potential impacts of the recommendations contained in the Report of the Board on both the activities of Corporation and its IFRS transition plan. 3. Electricity industry regulation: The Ontario Energy Board Act, 1998 (Ontario) (“OEBA”) conferred on the Ontario Energy Board (“OEB”) increased powers and responsibilities to regulate the electricity industry in Ontario. These powers and responsibilities include approving or fixing rates for the transmission and distribution of electricity, providing continued rate protection for rural and remote electricity consumers, and ensuring that distribution companies fulfill obligations to connect and service customers. The OEB may also prescribe license requirements and conditions of service to electricity distributors which may include, among other things, record keeping, regulatory accounting principles, separation of accounts for distinct businesses, and filing and process requirements for rate setting purposes. In its capacity to approve or set rates, the OEB has the authority to specify regulatory accounting treatments that may differ from Canadian generally accepted accounting principles for enterprises operating in a non-rate regulated environment. On May 1, 2010 the Company’s distribution rate as approved by the OEB provided for a revised rate of return of 7.54%, as compared to 7.62% in 2009. The Company has filed a Cost of Service Rate Application with the Ontario Energy Board (“OEB”) for revised distribution rates effective May 1, 2011. At December 31, 2010, the application was still under consideration by the OEB. It is anticipated that the Company will have the revised rates in place by May 1, 2011 pending the decision by the OEB in 2011.

Year ended December 31, 2010

33


KINGSTON HYDRO CORPORATION Notes to Financial Statements (continued)

KINGSTON HYDRO CORPORATION Year ended December 31, 2010

Notes to Financial Statements (continued) Year ended December 31, 2010 4. Capital assets:

4. Captial assets:

Cost Land Buildings and fixtures Substation equipment Distribution system: Overhead Underground Transformers Miscellaneous intangible plant Meters Tools and equipment System supervisory equipment Vehicle Application software Leasehold improvements Capital work-in-progress

$

197,343 546,237 4,985,094

2010 Net book value

Accumulated amortization $

– 169,925 1,661,859

$

197,343 376,312 3,323,235

2009 Net book value $

197,343 374,705 3,368,245

15,285,430 12,923,801 3,395,246 248,595 4,301,066 1,198,898 2,193,118 1,380,986 283,899 322,043 321,807

5,320,470 4,408,178 1,807,403 15,455 1,846,963 701,771 1,618,352 985,483 162,149 158,965 –

9,964,960 8,515,623 1,587,843 233,140 2,454,103 497,127 574,766 395,503 121,750 163,078 321,807

9,104,395 8,069,763 2,251,334 360,355 2,493,894 355,886 663,437 24,431 5,421 166,249 260,155

$ 47,583,563

$ 18,856,973

$ 28,726,590

$ 27,695,613

The cost and accumulated amortization of capital assets at December 31, 2009 amounted to 5. Note receivable from related party: $43,408,590 and $15,712,977 respectively.

During the year, the Company had a note receivable from Utilities Kingston, a company under common control. The total note receivable of $Nil (2009 - $250,000) was 5. unsecured Note receivable party: and from bore related interest at prime plus 0.5%. The balance was paid in full during 2010. 31, 2010, prime rate was 3.0% (December 2009 - under 2.25%). During At the December year, the Company hadthe a note receivable from Utilities Kingston,31, a company common control. The total note receivable of $Nil (2009 - $250,000) was unsecured and bore

payable City ofThe Kingston: 6. Note interest at primeto plus 0.5%. balance was paid in full during 2010. At December 31, 2010, the prime rate was 3.0% (December 31, 2009 - 2.25%).

In consideration for transfer of the City of Kingston’s electricity distribution business, the City of Kingston took back a note payable on January 1, 2000, for an amount toto50% ofKingston: the value of net assets transferred. The note payable, in the 6. equivalent Note payable City of amount of $10,880,619 (2009 - $10,880,619), bears interest at 7.25% per annum, In consideration for transfer of the City of Kingston's electricity distribution business, the City of has no fixed termsa note of repayment is unsecured. It is not the intenttoof50% theofCity Kingston took back payable on and January 1, 2000, for an amount equivalent the of Kingston to demand repaymentThe before 1, the 2012. Interest charges on(2009 the note value of net assets transferred. note January payable, in amount of $10,880,619 $10,880,619), bears interest at 7.25% per annum, has no fixed terms of repayment and is payable for the 2010 fiscal year were $788,845 (2009 - $788,845). unsecured. It is not the intent of the City of Kingston to demand repayment before January 1, 2012. Interest charges on the note payable for the 2010 fiscal year were $788,845 (2009 $788,845).

13

34

Financial Statements of KINGSTON HYDRO CORPORATION


KINGSTON HYDRO CORPORATION

Notes to Financial Statements (continued) Year ended December 31, 2010 7. Bank loan and letter of credit: The Company has an operating facility of $5,000,000 available at the Company’s option by way of a Prime Rate Based Loan or Bankers Acceptances with interest at the bank’s rate on Bankers Acceptances plus a .50% stamping fee. As of December 31, 2010, $1,975,000 (2009 - $Nil) was drawn at a rate of 3.0%, and $1,500,000 (2009 - $Nil) at a rate of 1.75%. A $3,000,000 committed floating rate revolving term loan facility is available at the Company’s option by way of a Prime Rate Based Loan or Bankers Acceptances with interest at the bank’s rate on Bankers Acceptances plus a 0.75% stamping fee. As of December 31, 2010, the Company had borrowed $2,250,000 (2009 - $2,250,000) at a rate of 3%. A committed reduced term facility (single draw) is available to the Company which was exercised in 2009 of $3,000,000. The fixed rate is 3.25% for a term of 10 years. Principal repayments due over the next 5 years are as follows: 2011 - $270,989; 2012 - $279,927; 2013 - $289,161; 2014 - $298,700; and 2015 - $308,554. To comply with requirements of the IESO, as a supplier of energy to the wholesale electricity market, the Company is required to post security determined in relation to the Company’s credit rating. A Letter of Credit has been provided in the amount of $5,301,839 as of December 31, 2010 (2009 - $5,301,839). In addition, the Company has a demand loan of $3,000,000 available by way of a Prime Rate Based Loan or Bankers Acceptances with interest at the bank’s rate on Bankers Acceptances plus a 1.00% stamping fee. This is available to assist with financing of smart meters of which $Nil was drawn at December 31, 2010. Interest on this facility has been set at the bank’s prime rate. As of December 31, 2010 the rate was 3%. Bank indebtedness is secured by a general security agreement representing a first charge on all the Company’s assets. 8. Pension agreements: On behalf of their employees who provide services to the Company, Utilities Kingston, a related corporation, makes contributions to the Ontario Municipal Employees Retirement Fund (OMERS), which is a multi-employer plan. The plan is a defined benefit plan which specifies the amount of the retirement benefit to be received by the employees based on the length of service and rates of pay. Total contributions by that Company to OMERS for 2010 were $920,731 (2009 -$848,876).

Year ended December 31, 2010

35


KINGSTON HYDRO CORPORATION Notes to Financial HYDRO Statements (continued) KINGSTON CORPORATION

Notes to Financial Statements (continued)

Year ended December 31, 2010

Year ended December 31, 2010

9. Regulatory assets and liabilities: 9. Regulatory assets and liabilities: (a) Regulatory assets are comprised of:

Smart meters

2010

2009

$ 3,930,347

$ 1,182,504

2010

2009

(b) Regulatory liabilities are comprised of:

Retail settlement variances Regulatory asset recoveries

$

(18,382) 1,856,591

$ 1,838,209

$

455,272 1,898,678

$ 2,353,950

10. Related party transactions:

10.(a) Related party transactions: 1425445 Ontario Limited (operating as Utilities Kingston): the year, the Company paid $9,944,539 (2009 - Kingston): $9,058,198) to 1425445 Ontario (a)During 1425445 Ontario Limited (operating as Utilities

Limited (operating as Utilities Kingston) for support services and capital works. 1425445 During the year, the Company paid $9,944,539 (2009 - $9,058,198) to 1425445 Ontario Limited is a shared-services business incorporated to provide support services to Ontario Limited (operating as Utilities Kingston) for support services and capital both the Company and to various infrastructure businesses of the City of Kingston. There works. 1425445 Ontario Limited is with a shared-services business incorporated to was no balance owing at December 31, 2010 respect to these transactions.

provide support services to both the Company and to various infrastructure businesses of the City of Kingston. There was no balance owing at December During the year, Company contracted for certain financial services from the City of withthe respect to these transactions. 31, 2010

(b) City of Kingston:

Kingston. As at December 31, 2010, the Company had an amount due from the City of

(b)Kingston City of representing Kingston: the cumulative net balance of cash receipts and disbursements processed by the Citythe of Kingston on contracted behalf of the for Company the amountservices of $2,279,091 During the year, Company certainin financial from the (2009 - $1,857,450). The City of Kingston pays the Company interest on the balance at a City of Kingston. As at December 31, 2010, the Company had an amount due from rate of prime minus 1.65%. the City of Kingston representing the cumulative net balance of cash receipts Charges the above services are recorded at exchange established andofagreed to by andfordisbursements processed by the City of amounts Kingston on behalf the Company the related parties. in the amount of $2,279,091 (2009 - $1,857,450). The City of Kingston pays the Company interest on the balance at a rate of prime minus 1.65%. Charges for the above services are recorded at exchange amounts established and agreed to by the related parties.

15

36

Financial Statements of KINGSTON HYDRO CORPORATION


KINGSTON HYDRO CORPORATION KINGSTON HYDRO CORPORATION Notes toFinancial Financial Statements (continued) Notes to Statements (continued) Year ended December 31, 2010 Year ended December 31, 2010

11. Employee future benefit liabilities: Pensionfuture plan:benefit liabilities: 11.(a) Employee former (a) The Pension plan:Hydro-Electric Commission of the Corporation of the City of Kingston

entered into agreements in 1995 with a number of former employees on nonThe former Hydro-Electric Commission of the Corporation of the City of Kingston entered into contributory defined benefit pension plans. An actuarial report of the accrued agreements in 1995 with a number of former employees on non-contributory defined benefit pension liability indicates thatofthe value of the accrued benefits pension plans. An actuarial report the present accrued pension liability indicates pension that the present as at December 31, 2010 is benefits $164,393 -$168,549). value of the accrued pension as (2009 at December 31, 2010 is $164,393 (2009 $168,549). Information with respect to the accrued pension liability is as follows: Information with respect to the accrued pension liability is as follows: 2010

2009

Accrued pension liability, January 1 Expenses recognized for the period Pension payments

$

168,549 8,296 (12,456)

$

172,472 8,420 (12,343)

Accrued pension liability, December 31

$

164,389

$

168,549

(b) Extended health care, dental and life insurance benefits: The Company is responsible for providing post employment extended health care, dental and (b) Extended health care, dental and life insurance benefits: life insurance benefits to employees of Utilities Kingston through the service agreement with

The Company is responsible for providing post employment extended health care, Utilities Kingston. An independent actuarial study of the post-retirement and postdental and benefits life insurance to employees of Utilities employment has beenbenefits undertaken. The most recent actuarial Kingston valuation ofthrough the futurethe service with Kingston. An independent study of the benefits agreement was completed asUtilities at December 31, 2007. This resulted actuarial in a net unamortized and post-employment been undertaken. recent post-retirement actuarial loss to be amortized beginning in benefits 2008, on has a straight-line basis overThe the most expected average remaining service life of the related employee groups, which was estimated to be 13 actuarial valuation of the future benefits was completed as at December 31, 2007. years.resulted in a net unamortized actuarial loss to be amortized beginning in This 2008, on a straight-line basis over the inexpected remaining service The significant actuarial assumptions adopted estimatingaverage the Company's accrued benefitlife obligation are as follows: of the related employee groups, which was estimated to be 13 years. The significant actuarial assumptions adopted in estimating the Company’s accrued Discount obligation rate 5.0% per annum benefit are as follows: Salary escalation Dental benefits escalation Discount rate escalation Health benefits

3.0% per annum 4.0% per annum per annum 8.0%5.0% per annum in 2008, decreasing to3.0% 4.0% over 12 years per annum

Salary escalation

Dental benefits escalation

4.0% per annum

Health benefits escalation

8.0% per annum in 2008, decreasing to 4.0% over 12 years

Year ended December 31, 2010

16

37


KINGSTON HYDRO CORPORATION KINGSTON HYDRO CORPORATION Notes to Financial Statements (continued)

KINGSTON HYDRO CORPORATION Notes to Financial Statements (continued)

Notes to Financial Statements (continued) Year ended December 31, 2010

Year ended December 31, 2010 Year ended December 31, 2010

11. Employee future benefit liabilities (continued): 11. Employee future benefit liabilities (continued):

11. Employee future benefit liabilities (continued): E  xtended health care, dental and life insurance benefits (continued): (b) (b) Extended health care, dental and life insurance benefits (continued): (b) Extended health care, dental and life insurance benefits (continued): Information respect toaccrued these accrued benefit liabilities Information withwith respect to these benefit liabilities is as follows: is as follows: Information with respect to these accrued benefit liabilities is as follows: 2010 2010

2009 2009

Accrued benefit liabilities, January 1 Accrued benefit liabilities, January 1 Service cost Service cost Interest Interest Other Other Amortization of actuarial loss Amortization of actuarial loss Benefits paid for the period Benefits paid for the period

$ 1,006,343 $ 1,006,343 43,783 43,783 54,306 54,306 (5,472) (5,472) 37,353 37,353 (87,235) (87,235)

$ $

967,775 967,775 45,608 45,608 60,217 60,217 (2,901) (2,901) 38,474 38,474 (102,830) (102,830)

Accrued benefit liabilities, December 31 Accrued benefit liabilities, December 31

$ 1,049,078 $ 1,049,078

$ 1,006,343 $ 1,006,343

These accrued benefit liabilities at December 31 include the following components: These accrued benefit liabilities at December 31 include the following components: 2010 2010

2009 2009

Accrued benefit obligation Accrued benefit obligation Unamortized actuarial losses Unamortized actuarial losses

$ 1,324,753 $ 1,324,753 (275,675) (275,675)

$ 1,311,901 $ 1,311,901 (305,558) (305,558)

Accrued benefit liabilities, December 31 Accrued benefit liabilities, December 31

$ 1,049,078 $ 1,049,078

$ 1,006,343 $ 1,006,343

These benefits will be paid to Utilities Kingston as future benefit obligations are paid by These benefitswill will paid to Utilities Kingston futureobligations benefit obligations These benefits be be paid to Utilities Kingston as futureasbenefit are paid by are Utilities Kingston to its employees as part of the support services contract with the Company. Utilities to its employees of the support services contract with the Company. paid byKingston Utilities Kingston to as itspart employees as part of the support services contract (c) Futurethe benefit liabilities: Company. (c) with Future benefit liabilities: 2010 2010

(c) Future benefit liabilities: Future benefit liabilities are comprised of: Future benefit liabilities are comprised of: Pension plan Pension plan Health, dental and life insurance Health, dental and life insurance

$ $

164,389 164,389 1,049,078 1,049,078

$ 1,213,467 $ 1,213,467

2009 2009 $ $

168,549 168,549 1,006,338 1,006,338

$ 1,174,887 $ 1,174,887

17 17

38

Financial Statements of KINGSTON HYDRO CORPORATION


KINGSTON HYDRO CORPORATION

Notes to Financial Statements (continued) Year ended December 31, 2010 12. General liability insurance: The Company is a member of the Municipal Electric Association Reciprocal Insurance Exchange (MEARIE) which is a pooling of general liability risks. Members of MEARIE would be assessed, on a pro-rata basis, based on the total of their respective deposit premiums should losses be experienced by MEARIE that are in excess of their reserves and supplemental insurance, for the years in which the Company, and the former Hydro-Electric Commission, has been a member. The Company has not been made aware of any additional assessments. 13. Contingent liabilities: (a) T  he nature of the Company’s activities is such that there may be litigation pending at any time. With respect to claims at December 31, 2010 against the Company, management believes there are valid defenses and appropriate insurance coverage in place. In the event any claims specifically are suc­cess­ful, management believes that such claims are not expected to have a material effect on the financial position of the Company. (b) A  class action was brought under the Class Proceedings Act, 1992. The plaintiff class seeks $500 million in restitution for amounts paid to Toronto Hydro and to other Ontario municipal electric utilities (“LDCs”) who received late payment penalties which constitute interest at an effective rate in excess of 60% per year, contrary to section 347 of the Criminal Code. On February 22, 2011 the OEB released its Decision and Order on the Late Payment Penalty Generic Hearing (EB-2010-0295). The OEB has found that the costs sought to be recovered by distributors, namely the settlement of litigation before the Ontario Superior Court of Justice, were prudently incurred. Kingston Hydro Corporation’s share of the Late Payment Penalty class action costs approved for recovery is $104,031. The Company will make its required payment of $104,031 to a social agency in 2011 and then will recover the amount through a Late Payment Penalty rate rider which will commence on May 1, 2011 and end on April 30, 2012. (c) T  he Company provides a guarantee in favour of an affiliated company, 1425445 Ontario Limited, with a value no greater than 25% of the Company’s equity less the outstanding note receivable from 1425445 Ontario Limited. At December 31, 2010, this guarantee remained in place. No provision has been made in these financial statements in respect of any of the above contingent liabilities as management has assessed the risk of loss to be remote.

Year ended December 31, 2010

39


KINGSTON HYDRO CORPORATION

Notes to Financial HYDRO Statements CORPORATION (continued) KINGSTON Notes to Financial Statements (continued) Year ended December 31, 2010 Year ended December 31, 2010

14. Payments in lieu of corporate income taxes: The provision for amounts in lieu of corporate income taxes (“PILs”) differs from

14. the Payments in lieu corporate income amount thatofwould have been taxes: recorded using the combined Canadian federal

and Ontariofor statutory income tax rates. A reconciliation between theamount statutory The provision amounts in lieu of corporate income taxes (“PILs”) differs from the that would have been recorded using the combined Canadian federal and Ontario statutory income and effective tax rates is provided as follows: tax rates. A reconciliation between the statutory and effective tax rates is provided as follows:

Federal and Ontario statutory income tax rate

2010

2009

31.0%

33.0%

Income before provision for PILs

$

817,363

$ 2,147,562

Provision for PILs at statutory rate

$

253,383

$

Increase (decrease) resulting from: Capital cost allowance less than (in excess of) depreciation and amortization Ontario Capital Tax Tax effect of regulatory asset recoveries in current year Tax effect of other miscellaneous adjustments Provision for PILs

(53,869) 18,000 37,507 17,035 $

Effective income tax rate

272,056 33.3%

708,695

126,178 33,135 100,596 13,883 $

982,487 45.7%

Tax effects of temporary difference that give rise to future tax assets and liabilities are as follows: Excess of tax values over accounting values of fixed assets Future benefit liabilities Regulatory liabilities

40

$ 1,392,443 303,367 464,148

$ 1,405,775 293,722 492,903

$ 2,159,958

$ 2,192,400

Financial Statements of KINGSTON HYDRO CORPORATION 19


KINGSTON HYDRO CORPORATION

Notes to Financial Statements (continued) KINGSTON HYDRO CORPORATION

KINGSTON HYDRO CORPORATION Notes to Financial (continued) Year ended DecemberStatements 31, 2010 Notes to Financial Statements (continued)

Year ended December 31, 2010 Year ended December 31, 2010

15. innon-cash non-cash operating balances: 15. Change Change in operating balances: 2010

15. Change in non-cash operating balances: Decrease (increase) in due from City of Kingston Decrease in accounts receivable Decrease (increase) in billed revenue receivable Decrease (increase) in in payments due from City of Kingston Decrease (increase) in lieu of income taxes Decrease in accounts receivable Increase in unbilled revenue Decrease (increase) in in inventory billed revenue receivable Decrease (increase) Decrease (increase) in payments in lieu of income taxes Increase in prepaid expenses Increase in unbilled revenue Increase in regulatory assets Decrease (increase) in in due inventory Increase (decrease) to retailers Increase in prepaid expenses Increase (decrease) in accounts payable Increase in regulatory assets and accrued liabilities Increase (decrease) in due to retailers Decrease in deposits payable Increase (decrease) in Decrease in regulatory accounts liabilities payable and accrued liabilities Increase in future benefit liabilities Decrease in deposits payable Decrease in regulatory liabilities Increase in future benefit liabilities

2009

$ (421,641) 2010 720,208 (1,105,630) $ (682,000) (421,641) 720,208 (420,925) (1,105,630) 83,381 (682,000) (40,711) (420,925) (2,747,843) 83,381 345,734 (40,711) (2,747,843) (205,773) 345,734 (754,275)

16. Power distribution:

$ 1,333,611 2009 607,884 997,745 $ 1,333,611 240,480 607,884 (783,210) 997,745 (44,619) 240,480 (3,038) (783,210) (1,182,504) (44,619) (112,217) (3,038) (1,182,504) 657,636 (112,217) (14,778)

(473,654) (205,773) 38,580 (754,275) (473,654) $ (5,664,549) 38,580

(1,159,068) 657,636 34,640 (14,778) (1,159,068) $ 572,562 34,640

$ (5,664,549)

$

572,562

16. Power distribution:

As part of its license with the OEB, the Company is required to distribute power to the residents 16. As Power distribution: partCity of of itsKingston license and withtothe OEB,itsthe Company is required to distribute power to the of the charge ratepayers at rates established by the OEB. In addition,

itAsispart required remit toofthe IESO the purchase commodity in addition to other residents the Citywith Kingston and to for charge its ratepayers at rates established by of of its to license the OEB,payments the Company is required toofdistribute power to the residents costs specified by the OEB. The Company is not permitted to profit from the purchase and sale of the City of Kingston and to charge its ratepayers at rates established by the OEB. In addition, the OEB. In addition, it is required to remit to the IESO payments for the purchase of it ispower. required to remit to the IESO payments the purchase of commodity addition toisother of commodity in addition to other costsforspecified by the OEB. The inCompany not costs specified by the OEB. The Company is not permitted to profit from the purchase and sale permitted to profit from the purchase and sale of power. 2010 2009 of power.

Sales Costs of power

$

58,725,968 2010 (58,725,968)

$

Sales Costs of power

$ $

58,725,968 – (58,725,968)

$ 53,948,337 $ (53,948,337) –

$

$

53,948,337 2009 (53,948,337)

20

Year ended December 31, 2010

20

41


KINGSTON HYDRO CORPORATION

Notes to Financial Statements (continued) Year ended December 31, 2010 17. Financial instruments: (a) Fair value of financial instruments: The carrying values of the amount due from City of Kingston, accounts receivable, billed revenue receivable, payments in lieu of income taxes, bank loan, accounts payable and accrued liabilities, due to retailers and deposits payable approximate their fair value due to the expected short-term maturity of these instruments. The fair value of the regulatory liabilities is not determinable due to lack of market rates and terms. The fair values of the note payable to City of Kingston and notes receivable from related party are not determinable due to their related party terms. (b) Credit risks: Credit risk is the risk that a counterparty will fail to discharge its obligation to the Company reducing the expected cash inflow from Company assets recorded at the balance sheet date. Credit risk can be concentrated in debtors that are similarly affected by economic or other conditions. The Company has assessed that there are no significant concentrations of credit risk. 18. Capital risk management: The Company’s objectives when managing capital are to safeguard its assets while at the same time maintain investor and creditor confidence, and to sustain future development of the business. The Company includes shareholder’s equity and long-term debt including the note payable to the City of Kingston in the definition of capital. To maintain or adjust the capital structure, the Company may issue new shares, issue new debt with different characteristics, acquire or dispose of assets, or adjust the amount of cash and short-term investment balances held. There were no changes in the Company’s approach to capital management during the period. As part of its lending arrangements, the Company is subject to various financial covenants, including debt service coverage ratio and debt to capitalization ratio. In addition, the note payable to the City of Kingston is subordinated to the Company’s bank in favour of the bank loan.

42

Financial Statements of KINGSTON HYDRO CORPORATION


KINGSTON HYDRO CORPORATION

Notes to Financial Statements (continued) Year ended December 31, 2010 19. Change in contributed surplus: Prior to January 1, 2011, the Company paid a rate per use for vehicles that had been purchased and maintained by the City of Kingston. These funds were put towards the operation and maintenance of the vehicles, as well as contributing to a City of Kingston reserve fund, intended for the replacement of the fleet when necessary. During the year, the City of Kingston reviewed their tangible capital assets and determined that the vehicles are solely utilized by the Company, and the ownership, risks, and obligations thereof should be transferred to the Company. Therefore, on December 31, 2010, the fleet of vehicles with a total cost of $1,296,977 and accumulated depreciation of $932,637 were recorded to capital assets, and $364,340 was recorded as contributed surplus. Starting January 1, 2011, the Company will continue to pay a rate per use to the City of Kingston, however the fee will only support operational costs of the vehicles, and the Company will bear the future costs of replacement. 20. Comparative figures: Certain comparative figures have been reclassified to conform to the financial statement presentation adopted in the current year.

Year ended December 31, 2010

43


CORPORATION OF THE CITY OF KINGSTON

Shareholder Agreement

EL

Shareholder Agreement

VIC SER

LEGEND Ownership Management

EV EL EN

M REE AG TS

(Yet To Be Named)

Water Gas

Electric

Generation Company 1425447 Ontario Limited

Sewer Utilities Kingston – City of Kingston Management Agreement Fibre

Utilities Kingston – Kingston Hydro Corporation Management Agreement

Corporation of the City • Owns water, sewer and natural gas assets of Kingston •1  00% Shareholder of Generation Company • 100% Shareholder of Kingston Hydro Corporation • Provides corporate services to Utilities Kingston under Services Level Agreements • Management agreement with Utilities Kingston to manage and operate water, sewer and natural gas utilities Utilities Kingston • Owns the fibre optics assets and the equipment, tools and some vehicles utilized by the employees • Manages and operates water, sewer, gas, electricity and fibre optic utilities directly or through management agreements Kingston Hydro • Owns the electricity assets Corporation • Management agreement with Utilities Kingston to manage and operate electricity utility Generation Company • 100% Shareholder of Utilities Kingston Directors Mark Gerretsen (Chair), Mayor of the City of Kingston Gerard Hunt, Chief Administrative Officer, City of Kingston Jim Keech, President and Chief Executive Officer, Utilities Kingston Ronald Doyle, Member of the Public nominated by the City Arthur Jordan, Member of the Public nominated by the City

Officers

Mark Gerretsen, Mayor of the City of Kingston Jim Keech, President and Chief Executive Officer Nancy Taylor, Corporate Secretary Randy Murphy, Treasurer


Our thanks to Paul Wash and other contributors for their photographs.


P.O. Box 790 Kingston, Ontario K7L 4X7 613. 546.1181

www.kingstonhydro.com

Kingston Hydro Annual Report 2010  

Kingston Hydro Annual Report 2010 prepared by Catherine Stutt and Schelle Holmes for Kingston Hydro.

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